COST-BENEFIT ANALYSIS IN PRE-CONSTRUCTION PLANNING: THE ASSESSMENT OF ECONOMIC IMPACT IN GOVERNMENT INFRASTRUCTURE PROJECTS

Abstract

This study presents a systematic literature review of 100 peer-reviewed, DOI-indexed articles examining the application of cost–benefit analysis (CBA) in the pre-construction stage of government infrastructure projects. Guided by the PRISMA framework, the review synthesizes evidence from transport, energy, water, and social infrastructure sectors to evaluate how welfare-consistent economic impact assessment is operationalized before major public investment decisions are finalized. Inclusion criteria required an explicit counterfactual (do-nothing or do-minimum baseline), monetized benefits and costs derived from willingness-to-pay or shadow-pricing methods, and clearly stated decision indicators including net present value (NPV), benefit–cost ratio (BCR), and internal rate of return (IRR) with a transparent price base and discount rate. The analysis explores eight thematic domains: welfare-consistent definitions and indicators, appraisal regimes and parameter libraries, baseline demand and exposure modeling, valuation of user benefits, safety, and environmental externalities, discounting and time horizons, uncertainty architecture, distributional analysis, and treatment of wider economic impacts. Findings reveal that transport dominates the literature at 52 percent, followed by energy at 20 percent, water at 18 percent, and social infrastructure at 10 percent. Most studies employ do-minimum baselines (84 percent) and constant real discount rates (72 percent) with growing adoption of declining schedules for long-lived assets. While deterministic sensitivity testing is universal, fewer studies employ probabilistic analysis (37 percent) or reference-class adjustments (21 percent). The review identifies strengths such as increasing parameter transparency, improved handling of induced demand, and avoidance of double counting as well as gaps in distributional weighting, probabilistic robustness, and integration of wider impacts. The synthesis offers a standardized reporting checklist and sector-specific recommendations to enhance transparency, comparability, and decision-readiness at the planning gate. By consolidating methodological best practices across jurisdictions, this review positions pre-construction CBA as a rigorous, auditable tool for ranking public infrastructure options on a welfare-consistent basis before design and procurement commitments become irreversible.